Etienne, Xiaoli L.Baffes, John2015-11-042015-11-042015-09https://hdl.handle.net/10986/22843Income growth in emerging economies has often been cited as a key driver of the past decade’s com-modity price boom—the longest and broadest boom since World War II. This paper shows that income has a negative and highly significant effect on real food commodity prices, a finding that is consistent with Engel’s Law and Kindleberger’s thesis, the predecessors of the Prebisch-Singer hypothe-sis. The paper also shows that, in the long run, income influences real food prices mainly through the manufacturing price channel (the deflator), hence weakening the view that income growth exerts strong upward pressure on food prices. Other (short-term) drivers of food prices include energy costs, inventories, and monetary conditions.en-USCC BY 3.0 IGOPRODUCER PRICE INDEXGROWTH RATESFOOD PRICEMONETARY POLICYUNDERDEVELOPED COUNTRIESPRICE INCREASESLAGSDEVELOPING COUNTRIESPRICE SERIESSTOCKENERGY PRICESINCOMEINTERESTSUPPLY SHOCKSREAL EXCHANGE RATESPOWER PARITYEQUILIBRIUM PRICEEXPECTATIONSDEMAND GROWTHCOMMODITY PRICEAVERAGE PRICESEMERGING ECONOMIESINTEREST RATEEXCHANGEGDP PER CAPITADEVELOPING COUNTRIESEXPORTSELASTICITYPRODUCER PRICESPOLITICAL ECONOMYFOOD PRICESPRICE INDICESFISCAL POLICYEQUILIBRIUMVARIABLESPRICINGEXCHANGE RATEDEVELOPING COUNTRYPRICEINTEREST RATETREASURY BILLINFLATIONPRICE INCREASESPRODUCER PRICEDEVELOPING COUNTRYTRENDSPRICE FLUCTUATIONSDEVELOPMENTINFLUENCEPER CAPITA INCOMEMARKET REFORMSDEVELOPMENT ECONOMICSRESERVE BANKPRICE CHANGESEMERGING ECONOMIESPRICE VOLATILITYFOOD PRICEPRODUCTSEXCHANGE RATESINTEREST RATESINDUSTRIALIZATIONSUPPLY SHOCKSMARKETSMARKETINGDEBTINTEREST RATESAGRICULTURAL PRICESPRICE SERIESPRICE ELASTICITYPRODUCTREAL INTEREST RATEINVENTORIESPRICING POLICIESCLOSED‐ECONOMYINVENTORYAGRICULTURAL PRICESCOMMODITY PRICEPURCHASING POWERPOWER PARITYMARKET PRICEPRICE INFLATIONEXPENDITUREINCOME MEASURESEQUILIBRIUM PRICECOMMODITY EXPORTSCONSUMPTIONTECHNOLOGICAL CHANGEMARKET PRICESDISTRIBUTED LAGSPRODUCER PRICESPRICE TRENDSAVERAGE PRICEINTERNATIONAL TRADEVOLATILITYPRICING POLICIESSTANDARD OF LIVINGMARKET PRICESFUTUREFUTURE PRICEVALUECONSUMER PRICE INDEXPRODUCER PRICEMONETARY POLICYPURCHASING POWERCONSUMER PRICEFOREIGN INVESTMENTDEMANDGROWTH RATESAGGREGATE DEMANDCONSUMER PRICEPRICE CHANGESAGRICULTURECONSUMERSEXPENDITURESINCOMESPRICE FLUCTUATIONSEXCHANGE RATESBORROWING COUNTRIESAVERAGE PRICEDEMAND GROWTHMARKETENERGY PRICESINCOME EFFECTECONOMICSTREASURYRATE OF GROWTHPRICE MOVEMENTSSTANDARD OF LIVINGINSURANCETREASURY BILLTAXATIONCURRENCIESCOMMODITY PRICESECONOMIC DEVELOPMENTMANUFACTURING INDUSTRIESTRADECOPPER PRICEGDPGOODSSECURITYUNDERDEVELOPED COUNTRIESSTOCKSBARTERINVESTMENTSHAREECONOMIC DEVELOPMENTSUPPLYPURCHASINGBANKINGFISCAL POLICYRATE OF GROWTHCONSUMER PRICE INDEXINTERNATIONAL TRADEPRODUCER PRICE INDEXMARKET REFORMSCOMMODITIESEXCHANGE RATEMIDDLE‐INCOME COUNTRIESFOOD PRICESPRICE MOVEMENTSPRICE INDEXCOMMODITY PRICESCOMMODITYPRICESENERGY PRICEPRODUCTION COSTSDEVELOPMENT POLICYINCOME GROUPSMANUFACTURING INDUSTRIESWorking PaperWorld Bank10.1596/1813-9450-7424